TSMC (TSM) Stock: Record Q3 Revenue and a Packaging Price Hike Report

TLDR

• TSMC is reportedly set to raise prices for CoWoS advanced chip packaging by 10% to 20%, per the Commercial Times.
• AI demand is spreading from GPUs to server CPUs and custom chips, tightening packaging capacity.
• Equipment delivery times have stretched to six to eight months, up from three to six.
• Q3 revenue hit a record NT$1.494 trillion, up 41.2% from a year earlier.
• TipRanks shows a Strong Buy consensus on TSM, with nine Buys and one Sell.

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TSMC (TSM) stock slipped 0.39% on Tuesday, while its Taiwan listing (2330) rose 0.63%. The moves came after a Commercial Times report that the company plans to raise prices for advanced chip packaging by up to 20%.

Taiwan Semiconductor Manufacturing Company Limited, TSM

The report said foundries and third-party assembly and testing suppliers are preparing for price changes of 10% to 20% on chip-on-wafer-on-substrate (CoWoS) packaging. The service is widely used in advanced AI processors.

Demand is no longer limited to graphics processing units. Server central processing units and custom application-specific integrated circuits are now adding to the load.

Longer test times for AI chips are also squeezing packaging and testing capacity. Each chip spends more time in the queue before it ships.

Equipment is part of the problem too. Delivery times for new tools have grown to six to eight months, up from three to six months. Suppliers are struggling to scale up production fast enough.

Capacity Plans and Supply Deals

Analysts cited by the newspaper expect TSMC’s monthly CoWoS capacity to top 130,000 wafers in 2026. They see it reaching 200,000 wafers in 2027.

CoWoS combines AI processors and high-bandwidth memory in a single package. That is why it matters so much for chips sold to companies like Nvidia and Apple.

Earlier this month, GlobalFoundries announced a manufacturing agreement with TSMC. It will produce silicon interposers in the U.S. for TSMC’s CoWoS technology.

GlobalFoundries executive Ed Kaste said advanced packaging is key to meeting the performance and power needs of next-generation AI systems. He added that U.S. production will provide a reliable supply of key packaging components.

Q3 Results Show Strong Demand

TSMC’s third-quarter revenue reached a record NT$1.494 trillion ($46.72 billion). That was up 41.2% from a year earlier and beat estimates by $1.02 billion.

Net income rose 68.7% to NT$763.06 billion ($23.59 billion). Not a bad quarter by any measure.

Advanced chips did the heavy lifting. Chips built on 7nm and more advanced technologies made up 79% of wafer revenue, up from 77% in the second quarter.

The 3nm process contributed 33% of wafer revenue. The 5nm node followed at 28%, 7nm at 10%, and 2nm at 8%.

For the fourth quarter, TSMC expects revenue of $52.3 billion to $54.3 billion.

On Wall Street, TipRanks lists a Strong Buy consensus on TSM based on nine Buys and one Sell in the last three months. The average price target is $534.60, which implies about 26% upside. Another source cites an average target of $883, which would mean about 95% upside.